You’ve found the perfect deal: a week-long car rental for just $60 a day. You book it, proud of your savvy shopping. Then you arrive at the counter, tired from your flight, and are told that your booking comes with an $8,000 “standard liability.”
Suddenly, the agent is holding your keys and your credit card, explaining that you are personally liable for that full $8,000 if the car gets so much as a scratch, regardless of who is at fault. The only way to remove this risk, they say, is to buy their “Excess Reduction” waiver—for an extra $45 per day, effectively doubling the cost of your “bargain” rental.
If this high-pressure scenario sounds familiar, you’re not alone. The dramatic inflation of car rental excess fees in Australia is no accident; it is the core component of a carefully engineered business model.
The “Coverage Gap” Tactic
What was once a manageable excess of a few thousand dollars has ballooned. Our investigation found that major brands like Avis and Hertz now have standard excess fees around $5,500, with some luxury vehicles or budget operators pushing liabilities to $8,000 or more.
This figure is not arbitrary. It is a carefully calibrated point of financial leverage.
Rental companies know that most premium credit cards and domestic travel insurance policies offer rental excess cover. They also know the limits of those policies. Many platinum credit cards, for example, cap their coverage at $5,500. By setting their standard excess at $8,000, the rental company manufactures a “coverage gap.”
When you arrive at the counter, the agent can truthfully tell you, “Your credit card policy is great, but it only covers you for $5,500. You are still personally exposed to a $2,500 gap.” In that moment, the only solution they offer to cover that gap is their own expensive daily waiver.
This tactic transforms the conversation from a simple “no, I’m covered” to a much more anxious calculation of personal risk. This high-pressure sale, built on a foundation of inflated fees, is designed to make you feel exposed and force you into buying a high-margin product you don’t necessarily need.
This fee is the engine of a specific business model. Is it just aggressive business, or is it a calculated rort?
To understand the full business model, see the predatory tactics used by some budget brands, and learn how to protect yourself, [read our full investigation: An Investigation into Australia’s Car Rental Insurance Rort
